by Kofi Britwum and Matty Demont
At a time when policymakers in several countries across sub-Saharan Africa are seeking to increase production and importantly the appeal of local rice, findings from this study can be illuminating to the retail sector of rice value chains. Understanding external cues for local rice that resonate with both urban and rural consumers alike has the potential to grow the appeal of local rice in African markets.
Across the Global South where rice has emerged as the de facto staple, several governments are encouraging the production of local varieties. This is especially echoed in many regions across sub-Saharan Africa (SSA), which is projected to lead global imports of rice by 2026, representing 32% of global rice trade.
Global events may also be driving recent policy shifts towards rice import substitution across SSA, including the conflict between Russia and Ukraine, given substantial exports of grain from these areas to Africa—approximately 44% of the continent’s wheat between 2018 and 2020. With the many logistical hurdles that have stymied grain transport into SSA as a result of the conflict, the urgency to explore home-grown food and grain security solutions has been further amplified.
Domestic efforts to alleviate deficits are timely because, over the past several decades, rice production in SSA has trailed consumption, thanks to prolonged urban bias policies, market trends, and general dietary shifts. Despite the widening gap between local production and consumption levels, local rice markets have the potential to flourish in SSA, with recent findings showing significant capacity for an expanded market share for locally produced rice through value chain upgrading.
It has been noted, however, that focusing on supply-side interventions as the main driver in the development of local rice portfolios may not be enough to improve its competitive edge against imported rice, as consumers in SSA have consistently demonstrated a preference for rice quality attributes which they typically associate with imported versions. This has even led to rice consumers perceiving extrinsic attributes such as ‘foreignness’ as a quality cue, a general phenomenon in developing countries.
Consumers in several SSA countries preferred head rice (proportion of intact grains), slender grains, and parboiled rice. There is an increased valuation of parboiled rice in Benin, particularly when extrinsic attributes such as information on the benefits of the technology were conveyed.
Similarly, a greater likelihood to purchase locally produced rice processed through an improved parboiling technology among Cameroonian consumers has been observed, particularly when they perceived the product to be imported. In Uganda, agronomic gains of a non-preferred local variety had gained popularity in the markets over a preferred fragrant local version, although the popularity of imported fragrant rice was unmatched by both local versions, alluding to the complex amalgam of consumer constituents.
it has been suggested that while focusing on preferred attributes is essential in the development of local food products, other demand-side interventions and cues may be needed to improve the competitiveness of local rice against imported brands. In this context, an aspect that has received little attention in the literature is the improvement of the competitiveness of African rice vis-à-vis imports through extrinsic cues such as labeling and branding.
It has been found that urban Senegalese consumers in Saint Louis and Dakar were willing to pay price premiums for locally produced rice labeled with a geographic indication referring to the Senegal River Valley. The evidence did not strongly support the hypothesis that Senegalese consumers favor imported rice for reasons other than quality, such as its perceived foreignness.
However, this does not exclude the possibility that foreignness is construed as a quality cue, given that local rice generally has the reputation of being of inferior quality relative to imported rice.
Given the potential construction of foreignness as a quality cue, to increase market penetration of local rice in SSA, a logical question arises as to whether there is a need to differentiate or undifferentiate domestic from imported rice.
In other words, should domestic rice feature labels that mimic imported versions, or rather differentiate itself from the latter through distinctly local branding with traditional symbols and themes? This is poignant, particularly in light of recent insights concerning the role of cultural and colonial heritage in shaping African rice markets.
The evidence so far suggests consumers along the West African coastlines and farther away from centers of rice domestication tend to feature preferences for imported rice as a result of colonial heritage, whereas consumers who have descended from the lineage of original African rice domesticators, or who are culturally or geographically close to centers of rice domestication (cultural heritage) prefer local rice.
This divergence in preferences along local and imported rice traits presents an opportunity to explore parallels between heritage and rice branding preferences. In this study, we attempt to unravel these issues with a focus on Senegal in West Africa.
Senegal makes an ideal case study: its average per capita rice consumption, at 71kg, is distinctly higher than the West African average of 39kg, and while imported rice is still a common fixture of Senegalese markets which is a direct result of colonial heritage, the southern region of Senegal is home to centuries-old cultural heritage in rice with accompanying preference for local varieties. In other words, in Senegal, both market segments coexist.
Given this background, the main goal of the study is to elicit preferences for local versus international rice brands among urban Senegalese consumers, to understand the role of colonial and cultural heritage in brand preferences, and to determine price premiums for the brands in an endow-and-upgrade experimental auction framework.
To the best of the authors’ knowledge, this is the first such study to examine the role of branding and external cues on local rice preferences within the context of cultural heritage and colonial heritage. It was found that two market segments from auction experiments on rice branding in Senegal: a segment sensitive to domestic branding, and another with preferences aligned towards international branding.
Although two studies reported qualitative results from the market experiment, neither study integrated the results with recent insights on preferences induced by cultural and colonial heritage. It would be expected that cultural and colonial heritage drive preferences for, respectively, local and foreign brands, but this research question has never been formally analyzed.
This study subjects the dataset previously collected to a formal econometric framework, and given that participants’ ethnicities were collected, we are able to examine the role cultural heritage (through genealogical lineage) and colonial heritage play in shaping preferences for extrinsic cues on local rice.
At a time when policymakers in several countries across SSA are seeking to increase production and importantly the appeal of local rice, findings from this study can be illuminating to the retail sector of rice value chains. Understanding external cues for local rice that resonate with both urban and rural consumers alike has the potential to grow the appeal of local rice in African markets.
Consequently, this study extends the literature beyond demand-side preference elicitation of intrinsic quality attributes to a focus on extrinsic characteristics (branding) using a real choice and auction experiment. In addition, while current studies on rice preferences that incorporate cultural heritage and colonial heritage have largely focused on intrinsic attributes such as grain quality characteristics, we examine whether there is evidence for branding preferences for local rice among these key consumer segments.
The growing popularity of rice in the Global South, especially on the African continent where it is supplanting more traditional starchy staples has prompted agricultural policies intended to stimulate domestic production in an effort to overcome supply bottlenecks.
Tailoring breeding and value chain upgrading priorities towards a complex consumer segment whose preferences have been shaped by both cultural heritage and colonial heritage is an important piece of demand-driven interventions to increase the market share of locally produced rice. This study explores these issues through experimental auctions to illuminate branding preferences among consumers from both market segments, which coexist in Senegal.
Contrary to hypotheses that cultural heritage consumers will be inclined towards the local brands and those induced by colonial heritage the foreign brands, findings revealed that consumers endowed with local cultural heritage placed premiums on domestic rice with foreign-looking brands. However, consumers whose preferences have been induced by colonial heritage neither rejected nor discounted the local brands.
This suggests that foreignness is perceived as a premium quality cue even in market segments induced by cultural heritage. Branding local rice through a mix of local and foreign cues may thus be an effective strategy to market local rice to both market segments shaped by cultural and colonial heritage. Durabilis’ successful introduction of Terral is such an example; it features an Indian symbol with a local brand name translating into “welcome” or “hospitality” in Wolof.
The study also makes a methodological contribution to the experimental auction literature by employing the endogenous switching regression model in an endow-and-upgrade framework where the endowment is endogenous. Given that this auction framework yielded uncensored data, the full WTP distribution was elicited.
In lieu of researchers endowing participants with a fixed benchmark, this set-up demonstrates an alternative where participants can be part of the decision in choosing their own benchmarks in an endow-and-upgrade methodology.
A few limitations of the study are worth noting. First, although the two-stage elicitation (i.e., from a distance of 2 meters, and then from close inspection) mirrors consumers’ decision-making process for bagged rice purchases, it could have unwittingly signaled differences in intrinsic rice quality among the different bags.
When consumers take a sample from the bags to examine the rice, there is a potential for sampling error as the product typically contains impurities that are not perfectly randomized. This perhaps explains the weakening of the statistical significance of the determinants between the Probit and Selection equations, which may have weakened the explanatory power of the ESR model.
We also note that the ‘hypothetical’ variable is not completely observed since this was revealed only when participants outbid the randomly drawn amount but were reluctant to pay out-of-pocket. It is not observed among participants whose bids were lower than the randomly drawn amount. Thus, the ‘hypothetical’ variable should be interpreted with care, especially against the backdrop of this being observed for only 5% of participants.
Finally, just about 10% of participants had ethnicities that aligned with cultural heritage (5% from the primary center of ancient rice origin, and 5% from the secondary center). This is likely because participants were sampled from large urban centers farther away from rice cultural heritage. As such, the results need to be interpreted with care in terms of its generalizability.
Read the study:
Britwum K and Demont M (2023) What is in a label? Examining the influence of cultural and colonial heritage on preferences and willingness to pay for local and international rice labels in Senegal. 2023 Annual Meeting, July 23-25, Washington D.C. 335501, Agricultural and Applied Economics Association.
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